Will banks charge families to guard their deposits if Draghi further cuts interest rates?
The possibility that the central banks of Europe and the US will approve a new cut in interest rates has once again put the debate on the remuneration of
The possibility that the central banks of Europe and the United States will approve a new cut in interest rates has once again put the debate on the remuneration of household and business savings on the table. Is it possible that your entity will charge you to keep the money deposited in your bank account?
Financial clients have already seen how in recent years the profitability of their deposits has been falling little by little, reaching in some cases at 0%, in line with the performance of financial indices such as the Euribor. The rents saved in current accounts lose purchasing power each year by not even equaling the rise in inflation.
The situation is worse for financial institutions, which have to pay the BCE 0.4% for the daily deposits they keep in the supervisor's balance sheet as a result of their excess liquidity.
Most of the large financial entities have already passed this cost on to larger companies and, for years, they have been charged for keeping deposits and treasury accounts separate from the respective operating and custody commissions.
Can this rate be replicated on families if the situation of negative rates in Europe continues in the coming months or even gets worse? "No. The 0% barrier is impassable." Who responds is neither more nor less than José Ignacio Goirigolzarri, president of Bankia, for whom collecting the savers in Spain is nowadays "unthinkable".
The chairman of CaixaBank, Jordi Gual, was also pronounced yesterday, saying that the entity has not considered "at all" transferring the situation of negative rates to its retail clientele. "We have suffered negative rates since 2016 and it is very uncomfortable for us, our assets fall but the liabilities are capped at 0. It is very complex," explained Goirigolzarri during his participation in a financial conference organized by the Menéndez Pelayo University in Santander.
Why the bank does not move tab? Mainly, due to the fear of a deposit leak that would shake the balance of the group and its sustainability. The only alternative is for the entities to act jointly, which would trigger the alerts of the competition authorities and open the doors of the business wide open to the new financial competitors that operate in the digital field.
This has already been done with the accounts of the large Ibex companies and some entities are studying whether it would be possible - and convenient - to extend it little by little to SMEs, which make up 99% of the productive fabric of the country. However, the chairman of Bankia also ruled out this situation yesterday because it would not compensate the real cost of the deposit portfolio, composed of 80% of domestic savings.
The situation has passed in three years a bill of nearly 800 million euros to Spanish banks, reducing their profit and their ability to generate capital autonomously. However, this figure may seem lower compared to the cost of 7,500 million euros paid each year by the financial sector of the Eurozone, of which 4,000 million correspond only to German and French entities for the greater requirement of liquidity that implies your business model
The bank has asked on numerous occasions the European supervisor to moderate this situation with a reduction in the rates paid by the entities, something that for now Mario Draghi has opposed to force these groups to grant more credit and contribute to their policy. monetary expansion of economic reactivation.
The chairman of CaixaBank also warned yesterday of the "anomalous" effects that banking has on the "prolongation of negative rates". "We must respect the decisions of the ECB, but this prolongation of low rates has adverse effects on financial intermediation, we hope it is something timely," he remarked.
In the Bank of Spain do not share these regrets. Governor Pablo Hernández de Cos said last Monday that the situation, in any case, benefits the entities because it allows them to grant more credit and reduces the delinquency of customers by promoting economic growth. The debate of the types is served.
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- European Central Bank
- Bank of Madrid
- Mario Draghi
- savings and consumption
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